Get ready for … Cash for Clunkers II?

posted at 3:35 pm on March 29, 2011 by Ed Morrissey

Feel like buying a Chevy Volt? Probably not, thanks to the steep price tag; the car retails north of $40,000, a high price for a subcompact four-seater. What you may not know is that you’re already buying Volts, thanks to a tax credit designed to incentivize buyers to select the expensive electric car over less-expensive rivals in its class, a $7500 giveback to push the latest model from Government Motors. Now Congress wants to speed the subsidy process to make it immediate on purchase:

Ready for another cash for clunkers program? It looks like General Motors is attempting to replace it’s own consumer incentives with tax payer money. The car company, bailed out of bankruptcy in 2009 by the American tax payer, appears to be turning the government into an automatic rebate provider.

The Obama administration and their friends on Capitol Hill are floating around a proposal to change the $7500 tax credit for green vehicles. This change can be found not only in President Barack Obama’s budget but also a bill proposed by Senator Debbie Stabenow, Michigan Democrat.

Edmunds.com, a 45 year old trade magazine company that provides automotive information, posted a Department of Energy document listing the department’s funding highlights. The proposed Obama Budget, changes the existing $7,500 electric vehicle tax credit “into a rebate that will be available to all consumers immediately at the point of sale.”

According to Senator Stabenow’s website, her proposed legislation, known as the “Charging America Forward Act” (S.298), “will provide consumers with a rebate worth up to $7500 for plug-in electric vehicles at the time of purchase.”

While some are calling this Cash for Clunkers 2, as my friend Kerry Picket does in this report, there are a couple of differences. First, the program does not incentivize trade-ins, only the purchase of the vehicle. That’s an improvement over the original C4C in at least the sense that it didn’t destroy viable assets. The 2009 program destroyed cars that lower-income people could have purchased; instead, C4C created an artificial shortage in used cars that pushed prices higher and reduced availability. Also, this is not a new subsidy, but a new delivery mechanism for an existing subsidy.

That doesn’t make this idea any better. The Obama administration seems to have belatedly figured out that the people who needed the subsidy to buy the car couldn’t afford to wait several months for the rebate, but it’s still unclear how many sales were actually lost because of that. Even at $33,000, the Volt is a choice for those with plenty of liquidity. Thanks to uncertainties over battery life, replacement costs, and disposal, its resale value in the fourth year (when most loans would end) is unknowable, making the Volt a tough sale as an investment for people normally buying at these price points. People who qualify at the lower price but lacked the cash for the higher price are probably going to look for either more room and features, or for a vehicle with more known qualities, simply because they won’t be able to afford to guess wrong.

This means that the new “Charging America Forward” program does share this in common with C4C: it subsidizes sales that will take place anyway. It forces taxpayers to foot the bill for the private vehicle choices of others, many of whom can’t afford to buy new vehicles for themselves. It’s an attempt by Obama and Stabenow to pick winners in a market they don’t understand well as a means to prop up a company that the last two administrations rescued with tens of billions in taxpayer money already, and through a politically-engineered bankruptcy that upended investment law to benefit the unions.

And here’s one last question for the CAF advocates: Just where do you plan to get all of the electricity to charge these cars, anyway?

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Charging America Forward?! That’s such a clever play on words. Charge. Electricity. I’m so wowed by their marketing genius. But you know, when I think “charge” I also think “charge card”… owned by the American taxpayer. What a gas.

Subsidizing expensive status symbol autos by taxing middle class taxpayers that only the well to do can afford or want. Isn’t that compassion? Or is it noblese oblige? It’s kind of like when rich RINO’s who have a Mexican in their family call us middle class chumps nativists because we don’t want to be ‘obliged’ to pay for their ‘nobility’ of making America a subsidized opportunity for illegals. Wait. OK, I think I’ve figured it out now. It’s compassion and noblese oblige when we middle class dupes subsidize electric fad-mobiles for illegals AND the well to do. That will be nirvanna and utopia all in one.

Conservatives we really need to rally around a true conservative champion and get these fools out of power! If we don’t we really won’t have a country after a generation. And I am talking about removing these liberal, big government types on both sides of the aisle! They are destroying this country with their corruption! And yes choosing who wins in what should be an open competition is corruption! It must stop or we are doom to have a world run by the Chinese!

Are these idiots in Congress and the White House just trying to screw us all, or are they really that stupid and just don’t get it? I’m getting to where I am afraid to turn on the news, for fear of hearing what the clowns in Washington have thought of now.

Another stellar idea from the same group that brought us “WTF” “Odyssey Dawn” “high Speed Rail” in the heartland, “Obamacare” “Drill baby Drill” Rio style and the ever popular and successful, “Cash for Clunkers I” the origional.

Actually I’ve sat in a new volt and it is pretty well detailed and the fit and finish is great. In fact it would make a great $20,000 car! All the rebate is going to do is make the rich greenies feel good about themselves at our expense. I expect a new country song any day now, “Plug it in, plug it in”.

I saw someone driving a Volt at church Sunday. But, since I live in the Detroit area, I am willing to bet it was a GM employee driving a company car.

It’s just like a couple of years ago when Detroiters witnessed a lot of people driving Chrysler Aspens – all Chrysler employees or spouses of Chrysler employees who received the vehicles at massive discounts or were driving company cars.

Official sales figures from January indicate GM sold 321 Chevy Volts out of total sales of 178,897 cars and trucks sold. That figure is down from the 326 Volts sold in December. All that marketing money, those big subsidies, and they are selling fewer than 100 a week. I wouldn’t worry too much about building new electric generating plants to meet the stupendous demand for electric cars!

The proposed Obama Budget, changes the existing $7,500 electric vehicle tax credit “into a rebate that will be available to all consumers immediately at the point of sale.”

The Volt is not an electric vehicle, it’s a hybrid. But it gets the government subsidy for electric vehicles where the Toyota Prius doesn’t because GM lied about the drive train and then got away with it because of its government connections. At highway speeds the Volt gets around 30MPG, and that’s on premium gas.

The Volt is not an electric vehicle, it’s a hybrid. But it gets the government subsidy for electric vehicles where the Toyota Prius doesn’t because GM lied about the drive train and then got away with it because of its government connections. At highway speeds the Volt gets around 30MPG, and that’s on premium gas.

Why aren’t Government Motors executives in Congressional testimony on their fraudulent advertising of the Volt, which resulted in fraudulent subsidies? Could it be because little Bammie is the real CEO of Government Motors?

The Obama administration now admits that the VOLT has been “pre-clunkered”????

Government Motors is pushing a fatally flawed design which renders a new vehicle immediately useless!! And a pile of metal, plastic, and battery acid which performs no useful function is, by definition, a POLLUTANT!!! (Environmentally and Economically)

NOOOOOOOOOOOOOOOOOOOOOOO! I’m sick and tired of helping my stupid neighbors buy a new car. If the damn thing was any good, people would be flocking to the local dealership. Stop spending money we don’t have, you idiots.

wait a minute. I thought power plants were polluters. So how are we saving the environment by plugging our government mandated electric cars into a coal or nuke or oil power plant to recharge? Makes one go hmmmm.?.?.?.

wait a minute. I thought power plants were polluters. So how are we saving the environment by plugging our government mandated electric cars into a coal or nuke or oil power plant to recharge? Makes one go hmmmm.?.?.?.

abcurtis on March 30, 2011 at 11:31 AM

Yeah…what abcurtis said!!! Wouldn’t it be simpler if we brought back the “Stanley Steamer”…so that our cars could run DIRECTLY on coal!!!

Envirowackos are funny….especially when they actually try to run things…except that all of us end up paying to dispose of their trash (like the VOLT, windmills, etc).